Crypto Lender Celsius Tells Clients to Increase Collateral in Case of Margin Calls – CoinDesk – CoinDesk

Crypto Lender Celsius Tells Clients to Increase Collateral in Case of Margin Calls – CoinDesk – CoinDesk

Crypto lender Celsius warned clients in a tweet on Friday they should add crypto to their accounts in the event the lender has to demand additional collateral from borrowers.

In Friday’s tweet, the lender said clients should be prepared for margin calls because of “market conditions.”

Crypto lending is popular among holders who want to raise cash without selling their coins and market makers who want to fill orders quickly. The phenomenon could potentially improve liquidity and price discovery for crypto assets but it also has introduced systemic risks.

On Sunday, Nexo, another crypto lender, sent out an email to clients titled “Safeguarding Your Assets Throughout the Current Market Volatility,” in which the lender encourages its customers to set up “adequate notifications for price fluctuations and potential margin calls to avoid liquidation of your assets.”

“Yes, we issued a few margin calls but nothing dramatic at this stage,” said Nexo co-founder and managing partner Antoni Trenchev.

Meanwhile, crypto lender Unchained Capital adjusted its loan-to-value maximum down to 40% in February in response to crypto price increases at the beginning of the year. The new LTV is meant to “help protect clients from margin call scenarios,” said Unchained Capital CEO Joseph Kelly.